Monday, February 18, 2019

EUR/USD - 18 February 2019


Fundamental Highlights

The Euro fell to a fresh 2019 low of 1.1233 on Friday morning, but reversed course in the afternoon as the US Dollar weakened after US President Trump said that the US is closer than ever to reach a deal with China. He also declared a National Emergency on the border with Mexico and signed a congressional bill to avert another government shutdown. Moreover, a series of disappointing macroeconomic releases kept the pressure on the Dollar with Retail Sales posting their largest decline in roughly a decade on Thursday, but according to Friday releases, Industrial Production fell by 0.6% in January, and Capacity Utilization shrank to 78.2% from 78.8% previously. On a bright note, the preliminary Michigan Consumer Sentiment Index for February came in at 95.5, beating expectations and well above the previous 91.2. No economic data i scheduled today in Europe. In addition, Financial markets in the US are closed today for the President's Day holiday.

Technical Analysis

The Euro broke above the 1.13 key resistance level on Friday, but the 50-day moving average (blue line) is still acting as a strong resistance. If the bulls find enough momentum to break above this line, we could possibly see a retest of 1.1350 (R2). Howeve on for the medium and long terms, the bears are still in control and any shift in market sentiment can cause prices to break below multiple support levels at 1.13 (S1), 1.1270 (S2) and 1.1250 (S3).

Support: 1.13 / 1.1270 / 1.1250
Resistance: 1.1350 / 1.14

Chart (H4)